20160831_BSC_Vietnam Monthly Review_EN_2016M08

Macroeconomics
•    PMI rose from 51.9 in July to 52.2 points. Manufacturing activity continued to expand during the past 9 months.
•    Sales of retail and services decreased slightly by 0.3% and increased by 8.8% yoy. CPI in August rose 0.1% due to the increase in prices of medicines and medical services, making the CPI increase by 2.58% in 8 months.
•    FDI continues to be a bright spot with the implementation of USD 9.8 billion, up 8.9% yoy. Processing and manufacturing industry accounted for 68.7% registered capital. Registered capital reached USD 9.8 billion, increased by 24.3% over the same period.
•    The trade surplus reached USD 200 million in August and USD 2.4 billion over 8 months.
•    USD price was stable from VND 22,270-22,302 per USD, plentiful supply enables the purchase of central bank for reserves. The interest rate was stable, decreased for 1-month terms, but increased slightly for under 1-month terms.

Stock Market
•    VN-Index increased by 3.4%, exceeding the 0.8% rise of HNX-Index by the appreciation of the big stocks like VNM, GAS. Markets have been sharply divergent.
•    Liquidity in July reached VND 3.505 billion per day, up 14% MoM and was at the highest level in the last 1 year. Local investors boost trading, making liquidity increase well.
•    P/E of VN-Index and HNX-Index were 16.33x and 10.7x respectively. Ranking unchanged over the previous month, the P/E of VN-Index is reaching the average P/E in the region while the P/E of HNX-Index was low and decreased compared to the early year
•    Foreign investors net sold VND 1,909 billion, compared with net buying of VND 1,278 billion in July.

September Market Overview
The market is forecast to correct and follow sideway momentum in the first 2 weeks of September, before breaking up in the second half of the month. VN-Index is forecast to range from 650 to 680 points . Important support level of the month are 622 and 648, while resistance is 680.
Investment recommendation for September could be found for more details in the following reports:
  -   Stocks with positive second quarter earning results, and promosing third quarter outlook. However, investors should avoid stocks in ETF portfolio in the first 2 weeks of September.
  -  Stocks with positive cycle prospects such as Real Estate, Construction, Construction Materials, Port, and Power;
  -  Stocks under SCIC divestment plan and loosening ownership room for foreign investors
  -   In the long term, the stock recommendations of the BSC will be addressed in the 3Q2016 sector outlook (Link), stocks with positive changes recommended in our weelkly report (Link) and company/industry updates (Link).